Broker Check

Fact of the Day (Robinhood)

May 04, 2021

If you think that the promise of free trading is too good to be true on the Robinhood app, you are probably right. Founded in 2012, Robinhood makes money, in part, by sending customer orders to high-frequency traders in exchange for cash. It’s a controversial but legal practice in the brokerage industry called payment for order flow. When you buy or sell shares on Robinhood, the app is likely executing your trade at a slightly worse price than another broker would.-The Wall Street Journal, November 9, 2018